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Opinion: Most Likely Cities to Go Bankrupt

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I ... thus the opportunity to stabilize the trade and crowed ... and because he after back to the fundamentals of all ... the most important thing is not just the dot Corection dot question needs to address eighteen million dollars in liabilities ... but even more important ... is the car ability to the citizens of Detroit ... they're not getting the services they deserve it may happen ... welcome to Opinion Journal I'm Mary Kissel that was Michigan Governor Rick Snyder ... on the implications of Detroit's big bankruptcy lots of people watching ... what this president means not just for Detroit ... but for other broker nearly broke cities across the country ... Wall Street Journal Editorial board and or Polish ago is here ... to take editoral page editor ... Paul ... why is this president ... so in court and some people might look it this is a will isn't bankruptcy law clear when or why or why he wanted so we don't know that that the bankruptcy laws not clear in the case of Chapter nine because there would be a big fight over ... whether state law takes ... precedence here and and dominate or the federal bankruptcy code which allows chapter ... and that'll involve things like ... our pension benefits able to be in here or reduced as Kevyn Orr the Michigan emergency mended Detroit emergency manager wants to do ... the unions will fight to stay in the Michigan Constitution that's not a lot ... going ... on and or will say well we have to do that otherwise we really can get back to ... growing city ... this'll be fun out of court it's very important ... that what are the reasons this is important as as a potential legal precedent ... ok it's not just the pensioners watches right you've also got investors here to your creditors to creditors ... so you have is that play out the cards and unsecured creditors left on the call ... not knowing if they're old we don't know exactly why home bigger haircut don't take to clear their dire maul guaranteed to take a big one ... I don't know we can that'll be worked out in the bankruptcy process for ... Kevyn Orr gave them a very big one and they just might get in the center will take their chances in court ... no contest of the bill say you can impair contracts under the Michigan Constitution I suspect ... the loos that I think ... now have intentions will be and will be of will be a close Iran thing because there's enough ambiguity ... in the Chapter nine statute about federal preemption ... which under the Constitution federal law should ... dominate state law take precedence ... yes it's clear ... but if it's not clear the Supreme Court doesn't always side with the federal government was consulting contract out for awhile we will ... meet in the editorial today ... talked about Oakland as Detroit's doppelganger ... among other city centers in their proper almost broke down the into these other cities we talked about the editorial today to the time to turn things around could to try to be the spark that ... wakes them up in and says let's let's do something and they all had a really nice city Ascena's banish a overall as Detroit but ... are they in these other cities would mention Philadelphia Chicago ... um they all share ... characteristics with that right which is they've overpromised and pension benefits ... they have very very powerful public unions ... and they don't have that they haven't had the economic base to be able to drive the revenues to finance the sort to be doing ... is borrowing to pay to make a pension payments ... I there when you do that you incur more debt obviously ... but you also ... don't do anything to change the fundamental benefit so ... you've got a real problem there and soon or later ... that something's gotta give a new song last week in Chicago were Rahm Emanuel was saying look ... the pension crisis has already affected our schools ... is good to lay off ... people in the school system to meet the pension of about thirty seconds left is Bankruptcy unclean thing and that ... he draw a line under this reading or ... could it affect investment that it is unfortunate overall with a much better to work this out without bankruptcy ... but the what Bankruptcy does dues you get that provides the discipline ... it says if you can work it out ... we're going to make sure that we are able to ... take down the debts reduce the pensions ... and and honestly impair the creditors ... in India so it is the object lesson ... of all reminder once again the eternal lesson ... that there's no such thing as a risk free investments a thing as risk free in the days when you let me try even when you're learning to softer side when you when into sovereigns thank you Paul